A coalition of domestic goods manufacturers argues that higher tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs. However, many of these manufacturers currently depend on imported inputs because they are cheaper and more readily available. Which of the following is an assumption on which the coalition’s argument depends? A. Higher domestic production costs will not reduce the competitiveness of local firms in international markets. B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them. C. The higher tariffs will not prompt foreign governments to retaliate in ways that substantially reduce external demand for domestically manufactured goods. D. Any short term disruptions caused by switching suppliers will not permanently diminish the willingness of manufacturers to produce goods domestically. E. Replacing imported raw materials with domestic ones will not reduce the quality of the products local firms manufacture. V40-21

gemministorm

Joined: 26 May 2025

Last visit: 21 Apr 2026

Posts: 143

Own Kudos:

110

[1]

Given Kudos: 57

GMAT Focus 1: 565 Q82 V79 DI73 Verified score

GMAT Focus 2: 605 Q84 V83 DI73 Verified score

Posts: 143

Kudos: 110

[1]

25 Dec 2025, 02:39

Kudos

Bookmarks

our argument: reviving local production by switching to domestic manufactures.

A-> about export not central to our argument
B -> This is core to our argument for the revival to start
C -> will require more assumption to effect our argument
D -> required -> if disruption permanently diminish the willingness then end of revival.
E -> our argument is not about quality.
b/w B and D -> since our argument is more towards revival and not about sustaining the revival will go with B.

gchandana

Joined: 16 May 2024

Last visit: 22 Apr 2026

Posts: 192

Own Kudos:

140

[1]

Given Kudos: 170

Location: India

Products:

Posts: 192

Kudos: 140

[1]

25 Dec 2025, 03:01

Kudos

Bookmarks

A. Okay, but as long as they do well in local markets, we can still say we have restored local production. So this is not needed.
B. Yes, if they don't consider them as reliable enough, then with or without tariffs, local production can't be restored.
C. This is the same as A.
D. There is no discussion of disruption here(which will happen after switching); it is whether the manufacturers will switch or not in the first place.
E. We are not sure how quality is related to restoring local production.

Option B.

Bunuel

Gmat860sanskar

Joined: 05 May 2023

Last visit: 22 Apr 2026

Posts: 212

Own Kudos:

112

[1]

Given Kudos: 79

Schools: ISB '26

GMAT Focus 1: 605 Q82 V78 DI80 Verified score

Products:

Schools: ISB '26

GMAT Focus 1: 605 Q82 V78 DI80 Verified score

Posts: 212

Kudos: 112

[1]

25 Dec 2025, 03:22

Kudos

Bookmarks

Bunuel

Stimulus :

Conclusion : Increasing the tariff on imports will revive local production
Premise : Because imports are cheap and imposing tax will make local material cheaper

Let's look at options now :

A : Irrelevant, competitiveness is not related important here --- Incorrect

B : Interesting choice, because if manufacture don't trust local suppliers for sourcing, then there will be no switch. --- Hold

C: external demand will absolutely impact the production, but still it doesn't affect the demand from manufactures, and this option require more than 1 assumption --- Incorrect

D : This option is indirect and weak, require multiple assumption --- Incorrect

E : quality doesn't matter here, even if quality is poor, manufacturers still can decide to use it. --- incorrect

Ans - B

adityamntr

Joined: 15 Jul 2023

Last visit: 21 Feb 2026

Posts: 111

Own Kudos:

[1]

Given Kudos: 13

Location: India

Concentration: General Management, Strategy

Schools: Booth '27 Fuqua '27 Kellog '27

Posts: 111

Kudos: 81

[1]

25 Dec 2025, 03:25

Kudos

Bookmarks

Bunuel

A) arguement is about if firms would be able to use the local produce. Not affects
B) this is a key assumtption, if not, this will not enable firms to use the local priduce
C)maybe local deman can incrase more after this step. so not a crucial assumption.
D)willingnes of manafacturer, does not affects the ability to produce
E)quality of produce is not under consideration, hence not afects

Kinshook

Major Poster

Joined: 03 Jun 2019

Last visit: 22 Apr 2026

Posts: 5,985

Own Kudos:

5,858

Given Kudos: 163

Location: India

Schools: HBS '26 CBS '26 Wharton '26

GMAT 1: 690 Q50 V34 Verified score

WE:Engineering (Transportation)

Products:

Schools: HBS '26 CBS '26 Wharton '26

GMAT 1: 690 Q50 V34 Verified score

Posts: 5,985

Kudos: 5,858

25 Dec 2025, 04:26

Kudos

Bookmarks

Conclusion: A coalition of domestic goods manufacturers argue that higher tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs.

Premise: However, many of these manufacturers currently depend on imported inputs because they are cheaper and more readily available.

Objective: Find the assumption

Pre-thinking:
The argument assumes that price is the only factor for manufacturers in not choosing local production.
Local production will revive if manufacturers find marginally costlier domestic inputs viable alternative for their manufacturing and their demands can be met by local production.
If assumption is negated, the conclusion falls apart. (Negation test)

Options:

A. The argument is not about manufacturers competitiveness in international markets. The statement strengthens the argument but is NOT an assumption. Incorrect

B. If manufacturers will NOT regard as reliable enough to restructure their sourcing arrangement around them, then manufacturers will NOT switch to local production and it will NOT be revived. (Negative test passed). Correct

C. The argument is NOT about external demand of manufacturers' goods. Incorrect

D. Manufacturers may be producing good locally but with imported inputs. The real concern is whether they choose marginally costlier local inputs. Any short term disruptions caused by switching suppliers may impact their choice but option B is more convincing and a better choice. Incorrect

E. The argument is NOT concerned with quality of products manufactured or their external / international demand. Incorrect

IMO D

kapoora10

Joined: 13 Jul 2024

Last visit: 12 Apr 2026

Posts: 109

Own Kudos:

[1]

Given Kudos: 7

Location: India

Concentration: Real Estate, Sustainability

GMAT Focus 1: 645 Q88 V74 DI84 Verified score

GMAT Focus 2: 655 Q85 V83 DI80 Verified score

GPA: 8.03

WE:Corporate Finance (Finance: Investment Management)

Products:

GMAT Focus 2: 655 Q85 V83 DI80 Verified score

Posts: 109

Kudos: 95

[1]

25 Dec 2025, 04:43

Kudos

Bookmarks

Assessing each argument:
A=> The argument is about reviving local production and not about exports. Eliminate.
B=> This directly impacts the calls on local production and is necessary. Keep for now.
C=> This strengthens but is not required. Eliminate.
D=> Not a necessary point. Eliminate.
E=> The argument does not bring quality into the equation. Eliminate.

Final Answer => B

redandme21

Joined: 14 Dec 2025

Last visit: 05 Jan 2026

Posts: 97

Own Kudos:

[1]

Posts: 97

Kudos: 87

[1]

25 Dec 2025, 04:45

Kudos

Bookmarks

A The argument is about reviving local production, not necessarily exporting.

B Correct. This directly addresses the "more readily available" concern: if they don't regard them as reliable, they won't switch.

C It could happen but it's not needed for their logic to hold.

D This is about persistence, but the conclusion is about revival occurring, not necessarily long-term persistence.

E This matters, but "readily available" is mentioned in the passage as a factor. Reliability of supply could include quality, but passage emphasizes availability more. B is a better option.

IMO B

dolortempore

Joined: 15 Aug 2025

Last visit: 22 Jan 2026

Posts: 47

Own Kudos:

[1]

Given Kudos: 9

Posts: 47

Kudos: 44

[1]

25 Dec 2025, 04:52

Kudos

Bookmarks

The argument is focused on switching from imported raw goods to local.
Now manufactures are concerned about two things: cheaper and readily available

Now assume that having high tariffs close the gap between the cheaper tag, that both are marginally close...then their only concern would be if it is readily available or not.
So option focused on this would be our assumption.

Option A, C and D
all three are talking about other factors which might make manufacture think about switching which might be true in real world but in context of argument this is irrelevant

Option E talks about quality which is also not a concern from the context of argument.

Hence option B
which talks about reliability on domestic supplier. which makes sense

so Answer (B)

geocircle

Joined: 14 Dec 2025

Last visit: 27 Dec 2025

Posts: 90

Own Kudos:

[1]

Posts: 90

Kudos: 87

[1]

25 Dec 2025, 05:04

Kudos

Bookmarks

A The argument is about switching to domestic inputs, not necessarily about competing internationally.

B Right answer. If domestic suppliers are seen as unreliable, manufacturers won't switch even if tariffs make imports more expensive.

C The argument doesn't depend on export levels staying the same.

D The argument is about triggering the switch to revive production, not about long term persistence after disruptions.

E If quality drops, firms might hesitate to switch. But the passage explicitly highlights availability, not quality.

Answer B

topgmat25

Joined: 15 Dec 2025

Last visit: 05 Jan 2026

Posts: 90

Own Kudos:

[1]

Posts: 90

Kudos: 87

[1]

25 Dec 2025, 05:24

Kudos

Bookmarks

A The argument is not about keeping exports strong, but about reviving local production.

B If manufacturers don't see domestic suppliers as reliable, they will not switch regardless of tariffs. Correct answer.

C Even if retaliation occurs and exports fall, local production could still rise for the domestic market.

D While disruptions could affect long-term commitment, the argument is about revival.

E This is a plausible concern, but the passage says availability, not quality.

The answer is B

Reon

Joined: 16 Sep 2025

Last visit: 28 Mar 2026

Posts: 134

Own Kudos:

121

[1]

Given Kudos: 4

Posts: 134

Kudos: 121

[1]

25 Dec 2025, 05:32

Kudos

Bookmarks

A coalition of domestic goods manufacturers argues that higher tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to marginally costlier but now tariff-free domestic inputs. However, many of these manufacturers currently depend on imported inputs because they are cheaper and more readily available.

Which of the following is an assumption on which the coalition’s argument depends?

A. Higher domestic production costs will not reduce the competitiveness of local firms in international markets. (It concerns international competitiveness, which is not necessary for local production to increase) Wrong

B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them. (The argument says that higher tariffs will cause firms to switch inputs, But this only works if domestic suppliers are sufficiently reliable in terms of supply, capacity etc. If firms doubt this, or seek other foreign suppliers. Then it would undermine the claim that tariffs will revive local production) Correct

C. The higher tariffs will not prompt foreign governments to retaliate in ways that substantially reduce external demand for domestically manufactured goods. (This could affect the outcomes but it is not a necessary assumption) Wrong

D. Any short term disruptions caused by switching suppliers will not permanently diminish the willingness of manufacturers to produce goods domestically. (This is not about the initial mechanism, it is not necessary) Wrong
E. Replacing imported raw materials with domestic ones will not reduce the quality of the products local firms manufacture. (It is about product quality, it is not essential to claim that the firms will switch inputs and boost domestic production) Wrong

B

firefox300

Joined: 15 Dec 2025

Last visit: 27 Dec 2025

Posts: 90

Own Kudos:

[1]

Posts: 90

Kudos: 87

[1]

25 Dec 2025, 05:38

Kudos

Bookmarks

A International competitiveness is not required for the basic claim that production will increase domestically.

B CORRECT. This is essential. The passage says manufacturers currently use imports because they are "cheaper and more readily available".

C The coalition's argument is about reviving local production, not necessarily keeping export demand unchanged.

D This speaks more to sustainability, not to the initial decision of reviving local production.

E Even if quality drops somewhat, the price advantage post-tariff might still make the switch worthwhile.

The correct answer is B

vasu1104

Joined: 10 Feb 2023

Last visit: 22 Apr 2026

Posts: 389

Own Kudos:

235

Given Kudos: 664

Location: Canada

Products:

Posts: 389

Kudos: 235

25 Dec 2025, 05:39

Kudos

Bookmarks

conclusion= higher tariffs on imported raw material will revive local production
reason- firms will switch from cheaper imports to costlier but tariffs free domestic inputs.
currently manufacturers depend on imported inputs because its cheap and readily available.

A. competitiveness of local firms in international market has no bearing .
B. even if with the higher tariffs what if local manufacture dont find the suppliers reliable enough to place order. the tariff free domestic inputs hold no value.
C. this talks about external demand for domestically produced good. thats not point.
D. it rather somewhat strengthen it.
E. quality is not main focus.

Bunuel

Dereno

Joined: 22 May 2020

Last visit: 22 Apr 2026

Posts: 1,398

Own Kudos:

1,373

[1]

Given Kudos: 425

Products:

Posts: 1,398

Kudos: 1,373

[1]

25 Dec 2025, 05:48

Kudos

Bookmarks

Bunuel

The question is upon tariffs imposed on imported goods, so that the price of Imported goods remain high. This, will push the local manufacturers to look for raw materials that are cheaper. So, the shift will be towards locally produced goods which are free for, these tariffs. Despite such advantages, the coalition of manufacturers mostly is looking for imported goods , the reason they cite for their decision is : cheaper and more readily available.

This means, the local goods without any tariffs exceeds the cost of imported raw materials after application of tariffs. Moreover, the goods are available readily.

We need to find an assumption:

A) This speaks about international market, while the context being discussed is local market, and raw materials pertaining to it. Hence, Wrong.

B) If the local manufacturers consider the local suppliers as reliable, then there is a greater likelihood that the switch might happen towards the local suppliers, considering the fact tariffs are imposed.

If we negate the option, the local suppliers are not reliable, this strengthens the view that manufacturers depending on foreign imported goods will stand. Hence, the correct answer.

C) This is wrong, as it speaks about the retaliatory measures a government usually takes to counter the tariff imposed on them.. out of scope option.

D) Willingness to produce a good depends on the financial condition, demand and supply constraints, customers choice etc. Hence, Wrong.

E) Despite the higher tariffs, the local manufacturers are dependent on imported goods. The reason was readiness in availability and cheaper price. Here it mentions quality, which is not taken as a comparative tool in this question. Hence, Wrong.

Option B

prepapr

Joined: 06 Jan 2025

Last visit: 22 Apr 2026

Posts: 92

Own Kudos:

[1]

Given Kudos: 4

GMAT Focus 1: 615 Q85 V80 DI77 Verified score

Posts: 92

Kudos: 82

[1]

25 Dec 2025, 06:02

Kudos

Bookmarks

Context: coalition of domestic manufacturers claims that raising tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to slightly expensive yet tariff free domestic inputs
Conclusion: HIgher tariffs on imported raw materials will revive local production
Logican gap: Local manufacturers must will willing for this switch despite higher costs. They must see domestic products as reliable

Evaluating options:
A)this is not required. we are not concerned about export competitiveness
B) This is an assumption. Manufacturers need to see the domestic suppliers as reliable to make a shift.
C)Retaliation is not the concern in the argument.
D)Wllingness to produce domestically is not a direct concern in the argument
E) This is not required. The manufacturers can still accept some quality tradeoff and still increase domestic production

Bunuel

canopyinthecity

Joined: 12 Jul 2025

Last visit: 22 Apr 2026

Posts: 92

Own Kudos:

[1]

Given Kudos: 19

Posts: 92

Kudos: 61

[1]

25 Dec 2025, 06:23

Kudos

Bookmarks

(A) Incorrect. The argument is in reference to domestic markets
(B) Correct. As if the reliability is not there, the goods might not be readily available, the manufactures might not shift to domestic inputs instead of imports.
(C) Incorrect. The argument is for trading in domestic market.
(D) Not relevant
(E) No. Even if the goods are of low quality, the manufacturers might want or not want to shift. Not an assumption as it does not guarantee the output.

MANASH94

Joined: 25 Jun 2025

Last visit: 22 Apr 2026

Posts: 89

Own Kudos:

[1]

Given Kudos: 16

Location: India

Schools: IIM IIM ISB

GPA: 2.9

Schools: IIM IIM ISB

Posts: 89

Kudos: 63

[1]

25 Dec 2025, 06:58

Kudos

Bookmarks

Premise says: Manufacturers argue that raising tariffs on imported raw materials will revive local production because firms will switch from cheaper imports to slightly costlier but tariff-free domestic inputs.
Conclusion is that: Higher tariffs will lead firms to substitute domestic inputs for imported ones, thereby reviving local production.
The assumption / gap seems to be: That firms can and will actually switch to domestic suppliers in practice, despite currently relying on imports for cost and availability reasons. Evaluating the answer choices

A. Higher domestic production costs will not reduce international competitiveness. Incorrect
This doesn't seem to be required. The argument is about reviving local production, not export competitiveness.
B. Manufacturers will regard domestic suppliers as reliable enough to restructure their sourcing arrangements around them. Sounds Correct.
If domestic suppliers are not reliable or scalable, firms would not switch, and tariffs would not revive production.
C. Foreign governments will not retaliate with tariffs. Seems incorrect.
External retaliation is outside the causal link claimed.
D. Short-term disruptions will not permanently reduce willingness to produce.
Seems incorrect. Too speculative and long-term, not central to the switching logic.
E. Product quality will not decline with domestic inputs. Seems incorrect.
The quality matters, but the argument relies more directly on availability and reliability, not explicitly quality.

Answer should be B

Bunuel